After Facebook closed down viral channels it became significantly more difficult for small social games developers to promote their games. Advertising on Facebook requires a huge budget as industry giants like Playdom and Zynga outbid small developers. Cross-promotion is the main alternative. However, it is only effective for developers who have many active users in their other games already. This promotion structure raised the question whether at all it will possible for small developers to compete with Zynga & Co. in the long run.

Jussi Laakkonen of Everyplay and Nabeel Hyatt of Conduit Labs decided to do something against the lack of cost effective promotion channels for small developers. The idea is simple: small developers band together. Their solution is Applifier, an innovative service that provides traffic exchange to the participating members in form of an ad bar above the game screen. With founding participants like Metaplace, BitMinion, Free Lunch Design, Wonderhill and Three Rings the Applifier network already counts over five million active users. Applifier is free for all participants and currently invite-only. We talked to Jussi Laakkonen about his “rebel alliance”.

SocialGamesObserver: How has Applifier been received since its launch?

Jussi Laakkonen: Growth has been fast and our members love the service. New members are joining in, so that definitely speaks to that Applifier fills a need in the market.

SGO: How did you come up with the idea?Jussi Laakkonen: The time was simply right for something like this. We were working on Applifier on our own at Everyplay and once we started reaching out to other social game developers it was obvious that many had similar ideas. We hit it off with Nabeel Hyatt from Conduit Labs. Applifier grew very fast from there on and the support of the first members was essential to the network’s very successful launch.

SGO: Using Applifier you are promoting other developers´ games in your game. Does Applifier target users that play several games at the same time anyway?Jussi Laakkonen: Yes, Facebook went on the record at the latest F8 that 200 million Facebook users play on average 4 games a month. Given that 4 games is an average value I don’t think it is far fetched to assume that the people who get more involved in games actually play 4-6 games at the same time.

SGO: Applifier is for free for participating developers. Are you planning to keep it that way?

Jussi Laakkonen:It is far too early to speculate about the future. What’s clear though is that Applifier is solving a burning need for its members. Just a couple of weeks after launch we looked at the fastest growing apps on Facebook and we’ve seen a number of our members appearing there like Nightclub City, My Vineyard and MonstrosCity.

SGO: Is Applifier a solution only for Facebook or do you plan to launch it on social networks that have announced to open up notification channels?

Jussi Laakkonen:We built Applifier to help us and other independent developers grow faster. As we and all of our members are on Facebook, we are naturally focusing all our efforts on Facebook for now.

SGO: Does Applifier work as one big network or can you bond together with a number of developers of your choice and exclude others?

Jussi Laakkonen: Applifier is one large network and this approach works great for our members.

SGO: Currently Applifier is invite-only. Do you plan to make it available for everybody?

Jussi Laakkonen: A core goal of Applifier is to ensure that the games found on the cross promo bar are of high quality and that the user experience is consistent. For these reasons we are keeping the network invite-only for the time being. We are always looking at ways to expand the network because a great selection of games makes it more appealing for the players, so I want to encourage independent social game developers who have quality games that are growing to get in touch with us!

Kwedit’s business model raised a lot of controversy. When Kwedit launched this February TechCrunch brand marked it “the first completely unreliable payment network“. Kwedit is an innovative payment method for social games that allows users to get their virtual goods immediately if they promise to pay for it later. The user must promise to repay the amount at a local 7-Eleven store or to mail the cash in. However, the promise is not enforceable. If a user does not repay the money as promised his “Kwedit score” will fall. When the score is very low the user will be simply blocked for the service until he restores his Kwedit score to by repaying. Another option Kwedit offers it to “pass the duck” where the user can ask friends or relatives to pay the amount for them. Again, the person asked has the right to refuse the payment.

When Kwedit launched it was absolutely uncertain how many users will repay. In March the repayment rate was 26% and 33% in May. According to Kwedit the rate will keep increasing because users who do not repay are removed and paying users are kept. Revenue increase for publishers is reported to be 5%. We talked to Ingo Lippert, CEO of MindMatics, German provider of the international mobile payment platform mopay and Magnus Alm, CEO of Swedish social game developer Muskedunder about their views on Kwedit.

Ingo Lippert, CEO of MindMatics

SocialGamesObserver: The debate about Kwedit’s concept is still going on. Do you think the concept is marketable?

Ingo Lippert: Kwedit combines micropayments with credits. Since Paypal acquired BillMeLater micro credits are a trend topic. When Kwedit launched they partnered with over 100 social games and 7-Eleven but nobody knew if the concept would work. After a couple of months Kwedit gained some experience and had to readjust several times. These are indications that the concept is still not fully marketable.

Magnus Alm: It seems to have been fairly successful so far, according to Kwedit’s own reportings. In the long term it might be a valid extra source of revenue for developers who have an audience that is hard to monetize due to lack of credit cards. So yes, why should it not be marketable? I think that Kwedit is aiming for a niche that has the potential to expand a lot.

SGO: Kwedits main target group in the US are children. Would you expect the same targeting if Kwedit came to Europe or could the service be valuable for different target grousp?

Ingo Lippert: Predominantly, Kwedit works with cash payments. That is why children are clearly the main target group. However, I would even extend the target group from 10-20 years because cash is often the only payment option for this group.

Magnus Alm: Certainly, the payment market in Europe is very fragmented and the Kwedit concept makes a good additional way of payment for younger users. Kwedit is going for a much smaller piece of the pie than the biggest payment providers, but that piece may grow fast if the large publishers start using their services.

SGO: What are Kwedit’s biggest advantages and risks?

Ingo Lippert: Kwedit’s biggest advantage from the user’s perspective is that the required amount for a transaction is instantly available. The convenient use of the service needs to be paid later in combination with a relatively inconvenient trip to the next 7-Eleven or to the post office. For the publishers there are significant disadvantages. The first figures show what has been expected before the launch: the missing willingness to repay the micro loan. Being banned from Kwedit does not seem to be sufficient to pressure users to repay. The consequence is a terribly low repayment rate. The second big disadvantage is the potential cannibalization of other payment methods. Customers who own credit cards or mobile phones can use Kwedit instead of other payment methods that would be more favorable for the publisher.

SGO: Would you consider Kwedit a threat for offer-based monetization platforms?

Magnus Alm: Not so much actually. I think that offers are a great way to monetize users if you have relevant offers. I would rather say that offers are a threat to Kwedit because they are trying to upgrade users from non-paying to paying and if there are offers that appeal to the users, I think they would rather take the offers than using Kwedit.

SGO: Do you think Kwedit can create new paying users for publishers?

Ingo Lippert: Yes, I am sure Kwedit has the potential to create more paying users. However, it is important to check who those new paying users are. Kwedit addresses players who have limited access to alternative payment methods. Those users are very young and possibly have a relatively bad payment behavior. Kwedit offers a channel to increase paying user rates but publishers should be aware of the potentially low repayment rate. Of course with the disadvantages mentioned previously. SGO: Is Kwedit a payment solution that you would consider for your games?

Magnus Alm: We have only looked at it briefly, but the idea is interesting. We would prefer to see some more developers using it and learning about their experience before trying it out ourselves though.

Yahoo! Inc., today announced a partnership with Zynga that will integrate Zynga’s popular social games through Yahoo!’s global network. The partnership enables Zynga games to reach more than 600 million people worldwide across Yahoo!, giving them access to new and deeper ways to engage with friends and make new ones. Zynga’s game integration with Yahoo! is part of Yahoo!’s commitment to offer personally relevant experiences to people from across the Web. Zynga games are expected to roll out on the Yahoo! network in the coming months and will include:

Ability for people to play Zynga games and access their personal Zynga game updates across Yahoo!’s properties including the Homepage, Yahoo! Games, Yahoo! Mail, Yahoo! Messenger and others.

Sharing of updates across multiple social experiences simultaneously while playing their favorite Zynga games on Yahoo!

Product integration of Zynga games with the Yahoo! Application Platform (YAP), Yahoo!’s OpenSocial container through which third-party developers can develop applications on Yahoo!

“Yahoo is focused on providing compelling, personally relevant experiences and social games are core to this experience,” said Hilary Schneider, executive vice president, Yahoo! Americas. “Zynga will bring top notch social game experiences to Yahoo!, including through our open platforms such as Yahoo! Application Platform and Yahoo! Updates. Yahoo! will also continue to work with other partners, developers and publishers to bring compelling innovations and experiences from across the web to our users.”

“With over 35 million unique users playing our games every single day, social games are fast becoming a leading source of entertainment worldwide surpassing most television shows,” said Mark Pincus, founder and CEO of Zynga. “Our partnership with Yahoo! gives millions of new users the ability to connect with friends and families through games.” Today’s partnership along with Yahoo!’s recently announced Facebook and Twitter relationships brings together social experiences from across the web and extends Yahoo!’s social strategy by providing multiple places across Yahoo! for people to play social games, access and share information, and connect with the people that matter to them the most.

BAFTA award-winning game developer Dynamo Games is growing and rebranding to meet the challenges of the rapidly evolving games industry. Dynamo has changed its focus, moved into larger premises, increased its headcount and is about to release its first social gaming title: Soccer Tycoon™. After working successfully in the mobile phone market for the last 6 years, Dynamo’s strategy for the future is changing to incorporate the huge opportunities now appearing within the social gaming and smartphone sectors.

These areas offer incredible potential for game developers, thanks to enormous numbers of users, alongside new business models and the ability to make games available directly to consumers. Apple’s iPhone App store has already made over two billion sales, while social network Facebook, now boasts over four hundred million users worldwide.To accommodate the company’s new growth Dynamo has moved into new, dedicated offices within the heart of Dundee– Scotland’s gaming capital– and increased its development team by 60% with further additions possible in the coming months.

Dynamo’s Managing Director, Brian McNicoll, said,“The games market is undergoing an incredible transformation which is changing every aspect of the business. New devices and platforms are creating and opening up markets which simply didn’t exist a few years ago. Developers cannot afford to ignore these new channels since the business models underpinning the‘mainstream’ games industry simply do not work. Dynamo has repositioned itself to take advantage of these new opportunities and ensure we remain at the forefront of the games industry as it continues to evolve. It’s about being smarter, not larger.”

Zynga today announced the acquisition of Beijing-based social gaming company XPD Media. The acquisition marks Zynga’s initial step into the Asian market, giving it a presence in one of the fastest growing markets and bolstering its talent in game development. “As the largest Internet market in the world, China is at the vanguard for virtual goods based gaming innovation,” said Robert Goldberg, VP of Corporate Development. “We expect our new office in Beijing and the incredible talent in the local market to play a strategic role in our mission to create the best social gaming experiences worldwide.”

XPD Media’s CEO, Robin Chan, will become Zynga’s GM of Asian business development. Co-Founder Andy Tian will lead the Zynga Beijing studio. The XPD team of 40 employees will be immediately integrated into Zynga’s global workforce and focus on engineering and product development. XPD Media, backed by True Ventures and Pilot Group, launched in early 2008 focusing on social game development for Asian and international social networks. Terms of the acquisition were not disclosed.

Martin Walfisz is the founder of Massive Entertainment. With his new Malmö/Sweden based company, Planeto, his goal is nothing less than to produce the best social game ever. Planeto’s first game is called Planeto Quiz and will launch soon. We talked to Martin about the motivation to produce social games and Planeto Quiz’ unique game mechanics.

SocialGamesObserver: Why did you decide to produce social games?

Martin Walfisz: I started Massive entertainment 13 years ago with the goal of creating the best games in the world. We focused on strategy games and Massive Entertainment created the best strategy games – World of Conflict was voted the best strategy game in the world at that time. Having achieved that, I decided to start up the new company. With Planeto we are still dedicated to produce the best games, but this time we want to create the biggest games in the world and social games fit our mass market focus.

SGO: Your first social game is a quiz and will be public soon. Why did you choose a quiz?

MW: When I started thinking what game can be played and immediately understood by everyone I realized quiz games have the best game mechanics.You get a question and four answer alternatives and everyone in the world will understand what to do. We realized that quiz games are very underdeveloped and there is so much more you can do that no one seems to have done yet.

SGO: But it is not just a classic quiz as we know it?

MW: Indeed. It is hard to describe. One way of looking at it is taking a game like World of Warcraft with its whole game design psychology, stripping down all the fantasy elements and replacing it with the game mechanics of a quiz. Although it is not a RPG we are keeping the avatar RPG elements. You have the features of finding items and leveling up. The simplest way of explaining what the game is: it is a mix of World of Warcraft and quiz – or Farmville and quiz if you like.

SGO: To round up and without revealing secrets: Planeto Quiz combines gameplay elements of a RPG with a quiz at its core. Can you tell us a bit more about the quiz questions?

MW: The questions are more general knowledge focused. The quiz part is where your knowledge matters but also additionally RPG elements like collecting items do matter. Every time you answer correctly, there is a chance that you get an item. For example you can win a ring of sports and if you put it on you have a higher chance to get a sports question and the correct answers on sports questions will give you a higher score. You can also find an action card that gives you a higher chance of getting a cool item the next time. Our game offers many options of how to play the quiz as well. You can play on your own but we also have cooperative quiz games or competitor quiz games, where you can play together against others or directly against your friends.

Leading social game developer Playdom and Acclaim Games, a developer of social networking and downloadable casual games, announced today that Playdom has acquired Acclaim. Acclaim was privately held and is based in Los Angeles, California. The terms of the transaction were not disclosed.

Since its establishment in 2006 under one of the gaming industry’s most recognizable brands, Acclaim has built a name for itself in the casual and MMORPG gaming space by developing and publishing free-to-play titles available on the Acclaim website. With more than 15 million registered online users already playing Acclaim’s games, the company launched RockFree, a Facebook guitar game, in March 2010, which now has tens of thousands of daily active users. Acclaim is currently hard at work on its latest Facebook game due to launch this summer.

“Joining forces with Playdom is a natural fit,” said Howard Marks, CEO of Acclaim. “Both companies share the vision of connecting people globally through quality social games. Our deep expertise in building multi player online games and Playdom’s vast player community will help us bring out the next generation of social games.”

Acclaim will become the newest team to join Playdom’s growing cadre of studios. Marks, a former Activision 2.0 co-founder and Chairman of the Activision Studios, will run the Acclaim studio for Playdom and serve in a senior strategic role for the parent company focused on Playdom’s business development activities. Acclaim’s Chief Technology Officer, Neil Malhotra, a longtime Marks colleague, will now act as the studio’s senior technical officer.

Aircel, the fast-growing pan-india telecom operator, with a subscriber base of over 36 million and ibibo.com, India’s leading social gaming and networking website have introduced first social gaming to mobile customers in India. Aircel & ibibo.com will offer “Great Indian Parking wars” on the aircel pocket internet, which will further expand to a catalogue of Games. The customers can log on to these games via their Facebook ID or ibibo.com ID.

Mr. Gurdeep Singh, COO of Aircel said: “With first social gaming on your mobile phones the intent is to drive innovation at the convergence of games and social platforms while you are on the move. It is our endeavor to offer our consumers exciting and engaging opportunities such as gaming and staying socially connected anytime, anywhere”.

“Great Indian Parking Wars” is a role play game in which users play owners of streets. As usual, game mechanics encourage social interaction with friends and integrated leader boards stimulate competition.

The games do not require any downloads, and are free-to-play with no subscription charges involved for the users. To access these games, users just need to visit aircel pocket internet on their WAP-enabled handsets. It makes a lot of sense to roll out social games in India on a mobile platform. Internet penetration in 2010 is estimated on 5.2% compared to 34% mobile penetration.

Bubble Island is wooga’s second game and one of the most popular games ever produced in Europe. It is a classic arcade game in which the player pops bubbles to reach the next level and to explore the island. Although tons of arcade games are available on Facebook Bubble Island sticks out from the pack and attracts almost a million daily active users and more than five million monthly active users. We looked into the key success factors of the game:

Emotional Attachment Most social games create engagement through emotional bonding. The user is engaged because he cares about the looks of his farm or the well-being of his pet. This concept is hard to transfer on an arcade game. A solution for this problem is emotional attachment to involved characters. In Bubble Island the user is accompanied by a raccoon whatever he does. Especially in the game where the user shoots bubbles the raccoon is highly involved. He responds directly to what the user does and to what happens in the game. The raccoon reloads the shooter, gets excited when a bonus is scored and sweats when the player is about to lose. He translates gameplay action into emotions and displays it to the player.

Established Game Concept Like all successful social games Bubble Island has a very low barrier of entry. The game is started and the user knows immediately what to do. In Bubble Island’s case gameplay is intuitive as the game takes one of the best-known match-three arcade game concepts and transfers it into a social game. In its core Bubble Island is a classic arcade match-three bubble shooting game on a high polishing level.

User Involvement through Content What also differentiates Bubble Island from most other arcade style games on Facebook is the adaption of gaming content for social networks. Users are not playing a couple of identical levels but 70 very different levels in which skills can be diversified. The result is high engagement: users want to finish each area on the Island and, as the data shows us, they come back on a regular basis.

Usage of the Social Graph Like in most successful social games players benefit from having many friends that are actively playing the game. Cooperative gameplay is rare in arcade games though. In Bubble Island friends can help each other to advance on the island. The game is constructed to create a win-win situation for the users’ entire Bubble Island-network. The more levels the users and their friends have played in total the more lives they get to retry a level if they fail. This element enhances conversation about Bubble Island outside the game which attracts new players to join.

With Bubble Island’s game design wooga found a way to cultivate a user attracting dialogue in the social network. Consequently, Bubble Island was not affected by the ban of Facebook notifications. Bubble Island will soon be launched on other social networks like on the German VZ Networks on which wooga’s first game Brain Buddies was top of the charts till recently. Next week we will cover wooga’s new game Monster World which was recently launched on Facebook.

Sibblingz is launching the first social game engine built for the multi-device world. For the first time, consumers will be able continue the same social game as they switch between devices on their PC to their mobile device, with the same set of friends. Sibblingz enables developers to take advantage of the massive growth in PC and mobile social game adoption. Sibblingz’ social game engine is built to create games on Facebook’s PC site as well as Apple’s iDevices and Google Android devices.

Launch partners include social games company, CrowdStar, and game development studio, SiXiTS. The Sibblingz social game engine was used to develop one of the most successful social games, CrowdStar’s Happy Island. “Game play on the smart phone and tablet is different from social game play on the PC like Facebook. iDevice gamers want more skill-based mechanics with console-like gaming feel,” said Peter Relan, Executive Chairman of CrowdStar. “By using the Sibblingz engine we can make a game optimized for the iPad that is connected to the same back-end data as the Facebook version. Sibblingz gives us multi-device reach with the flexibility to make a game experience unique to that device.” With Sibblingz, developers will be able to save millions in game development costs and decrease their time to market on launching cross-platform. Sibblingz will allow them to reach the broadest possible consumer audience.

“A solution like Sibblingz can have a dramatic impact on brands and developers looking to build a game that has scale from a cross-platform perspective,” said Michael Cai, Vice President of Video Games at the research firm, Interpret, LLC. “Right now it’s quite expensive to build a game on multiple platforms, and it’s a big hurdle for someone looking to create the next social game phenomena across devices.” With Sibblingz, a game can reach the hundreds of millions of smart phones and tablets flooding the consumer market in the coming year, having access to the many social games expected to be available on the devices.